FEATURE: How to licence your games

Video gaming merchandise has become big business, but both retailers and publishers are still learning what works. James Batchelor details the possibilities and pitfalls of bringing video game brands to new markets...

Video games-branded products are no longer just the impulse buys found in the corner of HMV or specialist games stores.

Today, Halo Mega Bloks are in all good toy stores, while novelisations of Assassin’s Creed and Battlefield are front and centre at WH Smiths.

Publishers are making a fortune from their IP beyond software sales and leading merchandisers insist this is not some passing fad, but a new world of possibilities.

“We’ve seen a vast amount of merchandise for movie and comic franchises. But video games, which are sometimes equal in turnover to some of the best known films, have not yet seen as much and thus each individual merchandise product is very much sought after.”

Licensing deals can certainly be lucrative but they’re not easy. Publishers must bear several things in mind when building their brands.

WHO ARE YOU SELLING TO?It’s important to bear in mind who the product is for, rather than what items you can slap a logo on.

Gaming audiences vary from hardcore collectors to mainstream and casual players. Just as their gaming tastes will differ, so too will their demands for merchandise. Angry Birds players are unlikely to want a soundtrack, for example, while a Call of Duty fan won’t rush to stores for plush toy soldiers.

AT New CEO Simon Kay says: “Is the audience for the game IP a hardcore fan or a casual fan? Is merchandise seen as a way of driving more users to the game? There are many questions that have to be looked at carefully for many game brands.”

LOOK BEYOND THE GAMESDrawing from more than just the games themselves can also present new possibilities – after all, many games have vast fictional universes crafted around them.

Andrew Sparkes, who heads up boys brand management at Mega Brands, says: “Our partners have incredibly creative content that translates really well into engaging and fun toy experiences. In many cases, this content does not just appear in the games – books, graphic novels and animation based on the properties also deliver the rich storylines to a broad audience.”

NOT ALL LICENSING WORKSSome games brands don’t automatically lend themselves to plush toys, figurines and lunchboxes.

Schmitz warns: “You cannot just take a main character and put him on a T-shirt. Gamers expect more. The better you understand why fans enjoy a particular game, the better you can create merchandise for it that actually sells extremely well.”

But Buzz Products account director Daniel Stabb encourages publishers to think beyond the typical forms of merchandise: “Traditionally, gamers have been presented with figurines, art books, soundtracks – but that’s just the tip of the potential product iceberg.”

IT CAN BE COMPETITIVEThe rivalry for big games licences has skyrocketed in recent years.

Current megahits like Call of Duty, Assassin’s Creed, Mass Effect and Uncharted are becoming hugely popular, and merchandising firms want to get involved in this success as early as possible.

“For Assassin’s Creed we were fighting them on the beaches and Call of Duty was equally active,” says Max Arguille, licensing manager at poster vendor GB Eye.

"Activision did a great Skylanders presentation this week and that should be a competitive process, now that the licensing community has woken up to the fact that video games can sell large amounts of licensed merchandise.”

Schmitz adds: “Video games merchandise has reached the masses and thus attracted a lot more companies wanting a piece of the cake than there used to be.”

Meroncourt’s Steve Walsh continues: “Many concepts we have at the early stages never get beyond the ideas board because someone has made a higher bid for the licence.”

CONSIDER AGENCIESMost merchandising is handled through licensing deals, in which publishers work with experienced agencies to bring their brands to new markets.

As these products become more and more popular, publishers are now bringing their licensing initiatives in-house.

Sega expanded its licensing team last year, while Square Enix’s merchandising division now handles products for other publishers.

This leaves agencies to help out games firms that have yet to licence their IP into other sectors.

“If you have the manpower and expertise to do such in house, there is no real argument for outsourcing it, except the above mentioned customer base,” says Schmitz.

“But if you don´t have that, a licensing agency can obviously help a great amount to turn a publisher’s licence into money in various ways.”

Kay adds: “Over recent times, the agents and licensees as well as retail have begun to understand this space a lot more but they still need educating on what works and what does not.

“Everyone needs to work together to make long term opportunities as opposed to quick wins.”

BE PROACTIVEAgencies stress that combining gaming brands with books, toys and the like is a two-way street. Publishers need to be proactive in taking their IP into new markets – and many already are.

“We started a trend by licensing the Halo brand,” says Mega Brands’ licensing VP Adrian Roche. “Since then we have been approached by every video game producer with opportunities.”

Schmitz adds: “We’re often approached by publishers or licensing agencies, but most of the time we have a specific idea of what we want to create for which game, so it is usually us approaching the licensors.”

GO TO LICENSING EVENTSThe best way for publishers to introduce their franchises to other sectors such as toys is to actively present them at these markets’ trade shows.

Every October, London-based event Brand Licensing Europe brings companies together from various industries, giving publishers the perfect opportunity to strike a deal with toy, clothing and book firms. Similarly, the annual Toy Fair is a great place to meet toy makers and show off new products.

MCV is the leading trade news and community site for all professionals working within the UK and international video games market. It reaches everyone from store manager to CEO, covering the entire industry. MCV is published by NewBay Media, which specialises in entertainment, leisure and technology markets.